New compliant stablecoin aims to strengthen Hyperliquid’s ecosystem and institutional adoption
Paxos has unveiled a proposal to launch USDH, a Hyperliquid-first stablecoin, designed to be fully compliant with the GENIUS Act in the US and the EU’s MiCA framework. The move highlights a growing push to merge regulatory clarity with decentralized finance innovation.
USDH designed for Hyperliquid growth
According to the proposal, 95% of the yield from USDH reserves will be directed into HYPE token buybacks, redistributing value to users, validators, and partner protocols. Paxos described the initiative as a way to “drive adoption, align incentives, and anchor the ecosystem’s next era of growth.”
The project will be led by Paxos Labs, a new division within Paxos that has acquired infrastructure developer Molecular Labs, known for creating Hyperliquid primitives LHYPE and WHLP. This acquisition strengthens Paxos’ integration with Hyperliquid’s onchain architecture.
Building institutional bridges
USDH will be deployed across both HyperEVM and HyperCore chains, positioning Hyperliquid to attract greater institutional interest. Paxos plans to connect USDH to global banking rails, leveraging its network of over 70 financial partners across the US, EU, Singapore, Abu Dhabi, and Latin America.
The stablecoin will also come with a rewards mechanism: most of its reserve yield will cycle back into the Hyperliquid ecosystem through HYPE buybacks and direct community distributions. Paxos further confirmed plans to integrate HYPE into its existing brokerage infrastructure, which powers services for PayPal, Venmo, and MercadoLibre.
Hyperliquid’s market dominance
The proposal comes as Hyperliquid commands 70% of the decentralized perpetuals market, with $400 billion in trading volume and $106 million in revenue generated last month, according to DeFi analytics. This places Hyperliquid ahead of most decentralized exchanges, trailing only Uniswap and PancakeSwap in weekly trading activity.
By aligning USDH with both compliance standards and ecosystem incentives, Paxos is betting on Hyperliquid’s continued rise as a leading platform in decentralized derivatives trading.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.